Corporate Tax was introduced in the UAE, and became applicable to financial years starting on or after 1 June 2023. According to this, eligible persons are required to register with the Federal Tax Authority (FTA). Registration is however, not the only thing to be considered in the compliance equation. When a natural person no longer satisfies the requirements at which they had registered, deregistration has to be done. Many overlook this, which can result in penalties and fines. This blog by Golden Falcon Consultants, providers of corporate tax deregistration service in UAE talks about how and when a natural person can deregister, the process involved in it, and the reasons why it is vital to get it right.

Understanding Corporate Tax for Natural Persons in UAE

A natural person is subject to corporate tax under the UAE Corporate Tax law when they engage in a business activity in the UAE. This becomes mandatory when their total annual turnover from business activities exceeds AED 1 million. This covers individual proprietors, freelancers and self-employed individuals who are under a trade licence. The individuals with a turnover that is less than AED 1 million are generally not required to register for Corporate Tax. Registered individuals are subject to 0% on taxable income up to AED 375,000 and 9% on income exceeding that threshold. 

What Is Corporate Tax Deregistration and Why It Matters

Corporate tax deregistration refers to the official procedure in which a registered taxable person applies to the Federal Tax Authority to withdraw their corporate tax registration. When the FTA approves this request, the individual no longer has to submit corporate tax returns or comply on a regular basis.

Not doing the deregistration process is likely to incur penalties because when your business is no longer in operation, remaining registered despite no longer meeting the requirements. So just like not registering your business incurs penalties, not deregistering will also incur penalties. 

When Should a Natural Person Deregister for Corporate Tax?

If you are a natural person opting for corporate tax deregistration service in UAE, the following conditions determine eligibility for deregistration:

• Turnover less than AED 1 million: Once your yearly turnover is below the mark and is likely to remain so, you will no longer have to file UAE Corporate Tax.
• When your business is stopped: If you stopped your business activity and closed your trade licence, then you don't have to stay registered.
• Cancelled trade licence: When you terminate your business, you cancel the trade license too as well.
• Business reorganization: When the business is transferred to another corporate body, then the natural person becomes free of taxation. This is why they have to deregister under individual registration.

Why You Should Not Delay Corporation Tax Deregistration?

Never delay working with corporate tax deregistration service in UAEfor deregistering from the FTA. This could lead to administrative fines, compliance liabilities and so on. This may also create issues with banks, free zones, and government authorities.

A natural person should file a deregistration application within the timeframe specified by the FTA (generally within 3 months of cessation or no longer meeting requirements). So if the trade licence is cancelled in January 2026, the application for deregistration has to be made by April of the same year. If there is a delay in this, you will have to get approval from the FTA.

Step-by-Step Process for Deregistration

1. Log into the EmaraTax portal with your registered credentials.
2. Go to the Corporate Tax section and pick the deregistration option.
3. Fill out the application form stating the correct purpose of deregistration.
4. Make sure to file all pending corporate tax returns and settle any tax owed to the government - FTA will not approve if there are any pending filings and unpaid tax.
5. Send the application and save the confirmation reference number.
6. Wait for FTA inspection and approval. If needed, FTA may request additional documentation.

Documents Required for Deregistration

• Trade licence cancellation certificate 
• Proof that you stopped your business activity 
• Emirates ID of the natural person 

Any additional supporting documents as required by the FTA. 

Common Challenges Faced During Deregistration

Working with corporate tax deregistration service in UAE would help meet the following challenges. Here are some of them:

• Pending tax return filings
• Pending tax payments that need to be disbursed
• Incomplete documentation
• Errors in the EmaraTax portal submission

How Golden Falcon Consultants Can Help

Golden Falcon Consultants is a UAE based tax and business consulting firm with a wealth of experience in corporate tax compliance, registration, and deregistration of both natural persons and corporate entities. The team is well informed about the FTA procedures and operates in a systematic manner to make sure that all deregistration applications are correct, complete, and submitted within the stipulated period.

Our job starts by checking your eligibility for deregistration, checking for pending filings and preparing the documentation. We will help with the submission to the EmaraTax portal,so that you can close your corporate tax registration efficiently and without compliance risks. FTA approval doesn't happen automatically!

Conclusion

The deregistration of corporate tax is not an administrative process, but a legal requirement for all natural persons residing in the UAE. Do not delay it if you qualify under the requirements for deregistration. Contact GFC today to learn about when to deregister, the three-month deadline and how to clear all obligations before application so you can have a clean compliance record.